Auteco inks partnership with First Mining to advance Pickle Crow gold project

Auteco Minerals Ltd (ASX: AUT) announced that it has entered into a binding term sheet with First Mining Gold Corp to acquire up to 80% of the Pickle Crow high-grade gold project in Ontario, Canada.

The company reported that the agreement will enable First Mining to realise value for its shareholders through the earn-in partnership arrangement whereby Auteco utilises its strong technical exploration skillset and its financial backing to unlock the full potential of the Pickle Crow Gold Project. AUT said that the binding terms have been agreed, subject to formal agreement within 45 days.

It may be noted that the Pickle Crow gold project is an underexplored historical high-grade long-life underground gold mine that produced 1.5 million oz @ 16 g/t gold until the mine closed in 1966.

The company said that multiple regional high priority walk-up drill targets are scheduled for testing in 2020. AUT said that excellent gold recoveries of +98% were reported from conventional processing.

AUT announced the appointment of Mr. Ray Shorrocks as Executive Chairman and Mr. Steve Parsons as a Non-Executive Director. Auteco also reported the placement raising ~$1.2 Million to fast track exploration.

Pickle Crow project

The Pickle Crow project in Ontario, Canada, consists of ~190 km2 of tenure covering a major gold province (Red Lake +25 Moz, Musselwhite +2.3 Moz, Pickle Crow +1.5 Moz).

High-grade gold was successfully mined at Pickle Crow for more than 30 years from 1935 to 1966, producing approximately 1.5 Million oz at an average grade of 16.1 g/t gold.

Some of the historical unmined drill intersections adjacent to Pickle Crow underground mine infrastructure include 13.1 m @ 43.28 g/t gold from 530.35 m; 7.6 m @ 8.23 g/t gold from 492.5 m; 2.83 m @ 11.24 g/t gold from 547.67 m; 4.0 m @ 9.05 g/t gold from 102 m; 3.9 m @ 17.39 g/t gold from 200 m; and 3.2 m @ 134.26 g/t gold from 1139.8 m.

Acquisition of Pickle Crow

Auteco Minerals announced that it has entered into a binding term sheet to acquire up to 80% of the Pickle Crow Gold Project from First Mining.

Terms of agreement

As per the acquisition terms, First Mining will receive $50,000 cash within three business days of signing the agreement; and $50,000 cash and 25,000,000 shares of Auteco upon execution of a formal agreement expected to be finalized within 45 days.

The agreements states that Auteco will have Stage 1 Earn-In (51% earn-in, three years) on the project on Spending $5 million on exploration, with a commitment to spend $750,000 of that total within the first 12 months; and issuing 100,000,000 shares of Auteco to First Mining.

Upon completion of the stage 1 earn-in, the terms state that Auteco will have a two-year follow-on period (Stage 2 Earn-In) to acquire an additional 19% interest in the Project by spending a further $5 million on exploration; making a $1 million cash payment to First Mining within 90 days of completing the additional exploration spend; and issuing First Mining a 2% NSR royalty on the Project (1% of which can be bought back for US$2.5 million).

The terms also include a Buy-In (additional 10% to earn-in to 80%), wherein Auteco will have an option to acquire an additional 10%, exercisable any time post the stage 2 earn-in, by paying First Mining $3 million in cash.

The additional terms state that First Mining and Auteco will form a joint venture upon completion of the stage 1 earn-in; First Mining will be free carried, at a 20% interest, to a decision to mine; and Auteco will require shareholder approval to issue its shares.

Acquisition infrastructure

The company reported that the acquisition infrastructure includes large, all-season exploration camp and core facilities with sealed road access as well as local grid hydro power, Pickle Lake township, and airport within 5 km of the project.

First systematic exploration to commence

Through the Earn-In agreement with First Mining, AUT said that it is about to commence the first systematic exploration of the property in more than 50 years. This represents a unique opportunity for Auteco to revisit and unlock the potential of one of Canada’s historic, high-grade gold mines in a world class gold province.

Auteco announced that it intends to return to first principles at the project within the tenement area with a focus on discovering and developing new project scale, high-grade, near surface, JORC compliant gold resources to add the current resource inventory.

Changes in the Board

The company reported that its Board of Directors were strengthened by appointments of experienced mining executives Mr. Ray Shorrocks as Executive Chairman and Mr. Steve Parsons as a Non-Executive Director. The company said that Mr. Ian Gordon is resigning from the Board and the board of Directors.

$1.2 million placement

The company reported that it has firm commitments to raise ~$1.2 million at an issue price of $0.008 per share to enable the Company to fast track immediately on ground exploration.

AUT said that the Board of Directors (subject to shareholder approval) and management will participate in approximately 40% of the placement.

The placement is expected to settle on or around 3 February 2020.

Next steps

AUT said that it intends to rapidly advance the Pickle Crow towards drill testing and bringing the NI-43-101 estimated resources into JORC 2012 compliance.

High-priority targets for immediate drill testing outside of the Mined Areas at the Pickle Crow Gold Project include No.19 Vein Target – 13.13 m @ 43.28 g/t gold from 530.35 m, 7.6 m @ 8.23 g/t gold from 492.5 m, 2.83 m @ 11.24 g/t gold from 547.67 m, and 0.5 m @ 135.37 g/t gold from 595.9 m; No.16 Vein Target – 3.9 m @ 17.39 g/t gold from 200 m; No.1 Vein Target – 3.2m @ 134.26 g/t gold from 1139.8 m; No.5 Vein Target – 1.15 m @ 112.15 g/t gold from 959.5 m; No.5 BIF Target – 63.45 m @ 1.29 g/t gold from 3.5 m, and 4.0 m @ 9.05 g/t gold from 102 m; and No.13 BIF – 71.43 m @ 1.63 g/t gold from 120.37 m including 9.16 m @ 4.88 g/t gold.

Management comments

Auteco’s Executive Chairman, Ray Shorrocks said: “I’m delighted to have the opportunity to join the Board of Auteco Minerals and am looking forward to the next few years as our highly skilled geological team sets to work on exploring the Pickle Crow Gold Project.

The Project itself is located in a very well-known and prolific gold mining district in Canada, a tier one mining jurisdiction. In its day the underground mine produced a staggering 1.5 million ounces of gold at an estimated average grade of 16.1 g/t gold before the mine closed in 1966.

The Pickle Crow Gold Project is a significant brownfields exploration opportunity that has received very little exploration in recent times and has not benefited from modern exploration techniques.

I was recently fortunate enough to have been involved in one of Australia’s modern day high-grade gold discoveries with Bellevue Gold Ltd (ASX:BGL) and from what I can see so far and along with the rest of the Auteco team is that the historic Pickle Crow Gold Project has the hallmark for being able to replicate significant discovery success again.

The Auteco team and I are looking forward to working closely with our Canadian partners at First Mining who we hope will benefit greatly along with our Auteco shareholders and all other stakeholders as we commence systematic and effective exploration to advance the Pickle Crow Gold Project.”

Written By Jonathan Norris
Jonathan is a founder of and has been covering the resources industry since 2018. With over 17 years experience in print, broadcast and online media, Jonathan has seen first hand the transformative effect of online niche media.